An Easy Guide To Car Importation in Nigeria From The Developed Countries.
The phrase “car importation in Nigeria” uttered by many Nigerians sound too complicated for what it really means. The process of importing cars from abroad and getting it shipped directly to Nigeria is much easier than you’d think with the right information.
AUTOROYCE Team has carefully crafted out an easy and straight forward car importation guide presented to you in the most efficient manner. This is going to be one of the most detailed and yet simplest car importation in Nigeria guide you’ve ever come across. Keeping It Short and Simple.
Important Legal Disclaimer:
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This guide is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek the services of competent professionals in legal, business, accounting and finance fields. The contents of this guide are based solely on experiences and research. AUTOROYCE does not assume any responsibility or liability whatsoever for what you choose to do with this information. Use your own judgment to make decisions.
TABLE OF CONTENTS:
1. Vehicle sourcing abroad
2. Vehicle Payment abroad
3. Vehicle Shipping
4. Vehicle Clearing
Chapter 1: Vehicle Sourcing
A significant percentage of the vehicles found in Nigeria are imported from developed countries, mostly from the USA, CANADA, UK, BELGIUM, GERMANY and UAE. So you’ve probably got the name and model of a particular car you want to buy. Okay, you have two options for sourcing cars abroad without the need to travel abroad. Its either you buy through your trusted loved ones abroad or you buy online via a registered and reputable auctioning company abroad.
When buying through your loved ones abroad, it’s just as simple as you sending them the details of the car you need and they will visit car stores on your behalf to inspect and get the exact brand you requested. On the other hand, if you don’t have anyone abroad then, you will buy online through a reputable auctioning company abroad. Majority of the auctioning companies abroad have an official website where international buyers can leverage on to make purchases.
When buying through an auctioning website, you need to pay maximum attention to details and make research about terms and acronyms used on the website before making any purchases. The followings are Facts about auctioning website you need to know:
A. Foreign sellers list their new or used vehicles for sale on the auctioning platform.
B. Auctioning company verify each seller to be sure they are legit owners of the vehicles.
C. Auctioning company verify that the seller states the exact status and condition of the vehicle, even if damaged.
D. Potential vehicle buyers check the online auctioning platform for their vehicle choice.
E. Potential vehicle buyer checks the detailed information and pictures or videos offered by the seller.
F. The potential buyer will make sure they understand all the conditioning, status and price of the vehicle offered for sale by the seller.
G. The potential buyer will make sure they understand all the terms and acronyms used to qualify the vehicle status such as mileage, odometer etc.
H. The potential buyer can either propose to buy the vehicle at the outright price listed by the seller or join a live auction and compete with other buyers bidding to buy the vehicle. In case a potential buyer joins the live auction, the vehicle will later be sold to the highest bidder within the stipulated bidding time frame.
I. After proposing to buy a vehicle at an outright price or being the highest bidder in a live auction, the auctioning company will serve as a middleman or an escrow between the seller and the buyer.
J. The auctioning company will facilitate the purchase payment and the buyer will make purchase payment to the auctioning company.
K. Some auctioning company will also facilitate the exportation of your vehicle after the purchase is completed.
L. Majority of the vehicle auctioning companies does charge some minor fees aside from the actual vehicle fee, such as processing fees, signup fee and local shipping fee.
Here are some of the recommended auctioning platforms abroad with huge success story records:
Basically, that’s all about this chapter, the next chapter explains different means of making payment for your vehicle purchases abroad.
Chapter 2: Vehicle Payment abroad
Making vehicle purchase payment abroad can be very challenging due to the fear of being scammed or paying into wrong hands. Basically there are two major ways of making payment abroad directly to the auctioning company.
A. Direct online payment using a credit or debit card on the auctioning company’s website; however, there are some limitations to this payment method such as Local card daily limit or total declining of your local card by the auctioning website.
B. Bank wire transfer, this is the most preferred means of making payment abroad, Bank Wire transfer is mostly accepted from Nigerians, Nigeria debit cards are often declined on international platforms. If you have a credit card, that is the fastest and cheapest means of making payments. Bank Wire transfer mentioned above can be in the form of transferring money through the bank or a licensed exchanger to the auction site wallet via Western Union, Money Gram or transfer directly from your funded domiciliary account.
Once the vehicle purchase payment has been successfully made to the auctioning company, what next is how to export your vehicle and certify the foreign country’s custom requirement for exporting vehicles.
Chapter 3: Vehicle Shipping
In this phase of car importation in Nigeria steps, after a successful purchase payment, the buyer will be assumed the legal owner of the vehicle and will be responsible for all the further expenses needed to facilitate the shipment of the vehicle. Majority of the auctioning companies will render shipping assistance upon request; however, you can ask them upfront before making the vehicle purchase. Vehicle shipping expenses come in two phases:
A. Local shipping expenses: Basically, the local shipping expenses comprises of the cost of moving your vehicle from the auctioning company or seller’s premises to the international shipping port, and the cost of preparing the vehicle’s paper documents to certify the foreign country’s custom requirement for exporting vehicles. The local shipping expenses can be around $200 to $1000 depending on the distance of the auctioning company or seller’s premises to the international shipping port.
B. International shipping expenses: This phase involves contracting with a shipping company that will ultimately convey the vehicle to Nigeria. There are two means of shipping a vehicle from abroad, it either you ship by air or by water depending on your budget. Shipping by water cost around $1,000 to $2,000 depending on the weight of your vehicle and will land in Nigeria within 1 or 2 months while shipping by air cost around $5,000 to $20,000 depending on the weight of your vehicle and will land in Nigeria within 1 week.
Once again the auctioning company can help facilitate the vehicle shipping and exportation process upon receiving your shipping expenses payment.
Once the shipping contract has been successfully made on your behalf and the shipping company has issued your vehicle’s bill of lading document, the auctioning company will facilitate the sending of the original bill of lading document through any fast courier company. The original bill of lading document is needed to clear your vehicle at the Nigeria Seaport or Airport, on a regular basis the original bill of lading should arrive in Nigeria before the vehicle arrives.
The bill of lading document can be used to track the progress of the plane or vessel conveying the vehicle. The bill of lading will also contain your vehicle’s Estimated Time of Arrival (ETA).
Depending on the circumstances, you may be required to pay the shipping cost before your vehicle will be shipped or you pay the shipping cost at the point of clearing your vehicle at the Nigeria port. Now, it’s time to relax and track the progress of the Plane or Vessel conveying your vehicle to Nigeria. The next chapter will explain how to clear and certify the Nigeria Custom requirements.
Chapter 4: Vehicle Clearing
This is one of the most tasking steps to car importation in Nigeria process. Vehicle clearing in Nigeria can be confusing and time-consuming if you don’t have the right information, you should also be prepared financially to clear your vehicle and pay all the necessary clearing fees, the clearing fees can sometimes be close or more than the initial amount you bought the vehicle abroad.
Kindly take this chapter very serious; as it might make or break your plans, the followings are facts you need to know about clearing your imported vehicle at either the Nigeria Seaport or Airport:
A. Only Custom licensed clearing companies are legally eligible to clear goods at Nigeria port.
B. As such you cannot clear your vehicle yourself; you will need to hire the service of a Custom licensed clearing company.
C. You need to be careful and make some background research about a clearing company before making the final decision on whom to hire, as there are a lot of touts purporting to be a licensed customs agent loitering around various ports across the country.
D. You need to fully understand the complete breakdown of the clearing fees so as to know the exact cost and the necessary payment receipts you must have in your possession.
E. The cost and value of clearing is calculated in dollars and as such, the cost will always vary.
F. Failure to tender the necessary payment proofs required or using fake documents to certify the Custom requirement may lead to Custom impounding the vehicle. However, a credible clearing company should act in good faith to prepare all the necessary legal documents to certify the custom requirements correctly.
G. The vehicle clearing cost will vary depending on the status of the vehicle; the clearing cost of a brand new vehicle is twice the clearing cost of a used vehicle.
H. Imported cars should be cleared within 90 days of arrival at the Seaport or 30 days of arrival at the airport to avoid demurrage fees.
I. False declaration of the vehicle on your bill of lading document will lead to forfeiture for your vehicle.
J. The use of fake documents is a crime when clearing your vehicle. This, apart from forfeiture of the vehicle, can lead the importer to jail.
Breakdown of Vehicle Clearing Cost in Nigeria
A typical vehicle clearing cost includes Surface duty charge (35% duty charge, 35% levy charge), VAT charge (1.28 Trigger), Terminal charge, clearing company service fee and other miscellaneous.
A. The Nigeria Customs Service (NCS) Fees: The NCS fees and rate varies every year with some little fluctuations. The NCS fees include Surface duty charge (35% duty charge, 35% levy charge) and VAT charge (1.28 Trigger). Used vehicles only attract 35% surface duty charge and 1.28 Trigger, while New Vehicles attract 70% surface duty charge and 1.28 Trigger. VAT and other taxes charged by the NCS is usually calculated using a trigger code called 1.28 trigger code, which will be multiplied by the surface duty value to arrive at the total duty due to be paid directly to the NCS designated federal bank account.
Importantly, the mode in which the imported vehicles are valued by the Customs is through CIF (Cost, Insurance and Freight), which signifies that the customs charges due are estimated on the entire shipping value of the vehicle. The entire shipping value of a vehicle includes the summation of the actual vehicle cost, the shipping cost, and the cost of insurance.
B. Terminal charges vary depending on the vehicle type; Cars, SUVs and Trucks should attract ₦50,000 ₦60,000 ₦70,000 respectively.
C. Clearing Company Service Charge: This is actually negotiable depending on your vehicle type, however, on a regular basis, clearing company charges #100,000 and above as service fee for each vehicle.
ILLUSTRATION OF A TYPICAL VEHICLE CLEARING COST IN NIGERIA
Vehicle: Used Toyota Camry.
1. Vehicle CIF Value in Dollar = $2,794
2. Custom Exchange Rate = #326/$
3. Custom Surface Duty = 35%
Therefore, Surface duty value= 35% of ($2,794 x #326) = #318,795
4. Total Custom duty (Surface duty x 1.28 trigger) #318,795 x 1.28 = #408,057
5. Terminal Charges = #50,000
6. Clearing Company Service Fee= #100,000
Total clearing cost: #408,057 + #50,000 + #100,000
So, you can use the illustration above to model what it takes to clear an imported car in Nigeria. Here are some of the recommended Clearing Companies in Nigeria with success story records:
The Clearing Agent https://clearingagent.com.ng/
Mutaba Business Solutions Limited: Clearing and Forwarding Agency, Custom Licensed
Tincan Island Port complex, Apapa, Lagos.
Chapter 5: Conclusion
Whenever you decide to try car importation in Nigeria, it is highly recommended to fully acquaint yourself with all the current immigration laws and customs requirements of the country. It can save you from many possible mistakes. For instance, vehicles manufactured more than fifteen (15) years ago can no longer be imported into the country; in addition, importing vehicles through land borders is now illegal in Nigeria.
There are many government rules and regulations that will always surface in future as regards car importation in Nigeria. As you know, ignorance is not an excuse for breaking the law, and not in cases such as this. Update yourself with the current government rules and regulations.
A warning from the Nigeria Customs Service (NCS)
NCS official website for latest news https://customs.gov.ng/
The bottom line once again, before considering car importation in Nigeria, read up on the current NCS laws, warnings and requirements, find out the charges you would pay, research the car online, consult people who can help. And finally, be patient. Importing vehicles is not something you do in a rush. You need to patiently go through all the steps so as not to find yourself on the wrong side of the law later on.
We are glad to see you take your time to read this guide to the end, and we believe you know what it takes to import vehicles by now. This will help you save the huge car dealer’s profit margin to yourself. Even if you are still not buoyant enough to go through the process of importing vehicles yourself, you can still patronise the local car dealers as usual but, this time around you will be able to bargain smartly with any car dealer, leaving the car dealer with the only minimum profit margin.
AUTOROYCE TEAM will be glad to hear your feedback, questions and compliments via the comment section below. Thanks!